Organon affirms 2023 revenue and Adjusted EBITDA guidance and provides 2024 outlook

Regular dividend to remain primary capital allocation priority

• For full year 2023, the company expects revenue and Adjusted EBITDA margin to be within the ranges provided on November 2, 2023
• For full year 2023 the company expects free cash flow before one-time spin-related costs to be above previously provided range
• For full year 2024, the company expects revenue to grow in the low-single-digit range on a constant currency basis, and to achieve stable to improving Adjusted EBITDA margin
• The company’s annual dividend of $1.12 per share remains its primary capital allocation priority, followed by a balance of discretionary debt repayment and opportunistic business development

Organon (NYSE: OGN) today affirmed prior revenue and Adjusted EBITDA guidance, indicated that free cash flow before one-time spin-related costs is expected to be above the high end of the previous guidance range, and provided high-level financial objectives for 2024. Kevin Ali, Organon’s Chief Executive Officer and Matthew Walsh, Organon’s Chief Financial Officer, will discuss these updates as part of a webcast presentation at the 42nd Annual J.P. Morgan Healthcare Conference to be held tomorrow, January 9, 2024, at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time.

Updates to 2023 Financial Guidance Previously Provided on November 2, 2023

For full year 2023, the company is affirming prior revenue and Adjusted EBITDA margin guidance in the ranges of $6.15 billion to $6.25 billion and 30.5% to 31.5%, respectively. Full year 2023 free cash flow before one-time spin-related costs is expected to be above the high end of the previously provided range of $700 million to $800 million.

The information presented above reflects the company’s preliminary estimates subject to the completion of the company’s financial closing procedures and any adjustments that may result from the completion of the quarterly and annual review of the company’s consolidated financial statements. Organon will report its full year 2023 results and more fulsome 2024 outlook on February 15, 2024.

Preliminary Full Year 2024 Outlook

For full year 2024, Organon expects constant currency revenue growth in the low-single-digit range and stable to improving Adjusted EBITDA margin, which it expects to achieve, in part, through operating expense management.

Capital Allocation

The company’s annual dividend of $1.12 per share remains its primary capital allocation priority. Organon has generated, and expects to continue to generate, more than ample cash flow to service its dividend. The company expects to continue to use its remaining free cash flow to achieve its additional capital allocation objectives, which include discretionary debt repayment and the acquisition of assets that enhance Organon’s growth profile.

Webcast Information

Investors, analysts, members of the media and the general public are invited to listen to a live audio webcast of the company’s presentation at the J.P. Morgan Healthcare conference on January 9^th at: https://jpmorgan.metameetings.net/events/healthcare24/sessions/49500-organon/webcast?gpu_only=true&kiosk=true.

About Organon

Organon is a global healthcare company formed to focus on improving the health of women throughout their lives. Organon offers more than 60 medicines and products in women’s health in addition to a growing biosimilars business and a large franchise of established medicines across a range of therapeutic areas. Organon’s existing products produce strong cash flows that support investments in innovation and future growth opportunities in women’s health and biosimilars. In addition, Organon is pursuing opportunities to collaborate with biopharmaceutical innovators looking to commercialize their products by leveraging its scale and presence in fast growing international markets.

Organon has a global footprint with significant scale and geographic reach, world-class commercial capabilities, and approximately 10,000 employees with headquarters located in Jersey City, New Jersey.

For more information, visit http://www.organon.com and connect with us on LinkedIn, Instagram, X (formerly known as Twitter) and Facebook.

Cautionary Note Regarding Non-GAAP Financial Measures

This press release contains “non-GAAP financial measures,” which are financial measures that either exclude or include amounts that are correspondingly not excluded or included in the most directly comparable measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, the company makes use of the non-GAAP financial measures Adjusted EBITDA, Adjusted EBITDA margin, and free cash flow before one-time spin-related costs which are not recognized terms under GAAP and are presented only as a supplement to the company’s GAAP financial statements. This press release also provides certain measures that exclude the impact of foreign exchange. We calculate foreign exchange by converting our current-period local currency financial results using the prior period average currency rates and comparing these adjusted amounts to our current-period results. The company believes that these non-GAAP financial measures help to enhance an understanding of the company’s financial performance. However, the presentation of these measures has limitations as an analytical tool and should not be considered in isolation, or as a substitute for the company’s results as reported under GAAP. Because not all companies use identical calculations, the presentations of these non-GAAP measures may not be comparable to other similarly titled measures of other companies.

The company uses non-GAAP financial measures in its operational and financial decision making and believes that it is useful to exclude certain items in order to focus on what it regards to be a more meaningful representation of the underlying operating performance of the business.

Cautionary Note Regarding Forward-Looking Statements

Except for historical information, this press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about management’s expectations about Organon’s future financial performance and prospects, including preliminary full-year 2023 financial results, full-year 2024 guidance, and future cash flows and capital requirements, as well as statements concerning Organon’s capital allocation and expense management plans, future dividend payments, , and ability to acquire assets that enhance Organon’s growth profile. Forward-looking statements may be identified by words such as “believes,” “expects,” “will,” “would,” “potentially,” “foresees,” “intends,” “anticipates,” “plans,” “seeks,” “estimates,” “preliminary” or words of similar meaning. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include, but are not limited to, an inability to fully execute on our product development and commercialization plans within the United States or internationally; an inability to adapt to the industry-wide trend toward highly discounted channels; changes in tax laws or other tax guidance which could adversely affect our cash tax liability, effective tax rates, and results of operations and lead to greater audit scrutiny; an inability to execute on our business development strategy or realize the benefits of our planned acquisitions; efficacy, safety, or other quality concerns with respect to marketed products, including market actions such as recalls, withdrawals, or declining sales; political and social pressures, or regulatory developments, that adversely impact demand for, availability of, or patient access to contraception or fertility products; general economic factors, including recessionary pressures, interest rate and currency exchange rate fluctuations; general industry conditions and competition; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances; new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict its future financial results and performance; developments that result in changes to Organon’s capital allocation priorities; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; difficulties developing and sustaining relationships with commercial counterparties; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s filings with the Securities and Exchange Commission ("SEC"), including the company’s Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent SEC filings, available at the SEC’s Internet site (www.sec.gov).

Cautionary Note Regarding Preliminary Financial Information

The 2023 full year results set forth in this press release are still preliminary estimates and subject to Organon’s detailed quarter and year-end close procedures. Organon’s consolidated financial statements as of, and for the three and twelve months ended December 31, 2023, are not yet available. Accordingly, the information presented in this press release reflects the company’s preliminary estimates subject to the completion of the company’s financial closing procedures and any adjustments that may result from the completion of the quarterly and annual review of the company’s consolidated financial statements. As a result, these preliminary estimates may differ from the actual results that will be reflected in the company’s consolidated financial statements for 2023 when they are completed and publicly disclosed. These preliminary estimates may change, and those changes may be material. The company’s expectations with respect to its unaudited results for the period discussed above are based on management estimates. The company’s independent registered public accounting firm has not audited, reviewed or performed any procedures with respect to these preliminary estimates and, accordingly, does not express an opinion or any other form of assurance about them.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240108542270/en/